UK: Challenges Facing India’s Pharmaceutical Industry

According to the Federation of Indian Chambers of Commerce and
Industry (FICCI), globally, India ranks third for pharma
manufacturing volume and 14th in terms of value. In itself India
represents a major market for pharma companies with a population of
over 1.2 billion yet the country posts an impressive export
turnover of over US$10 billion, spread across 200 countries.
Domestic and international pharma companies, however, face a number
of major issues, including drug quality, clinical trial quality and
patent protection.

Drug Quality

The World Health Organisation (WHO) estimates that up to 30 per
cent of branded drugs sold in developing nations are counterfeit
which can have profound implications for patients. For example,
tuberculosis and Malaria counterfeits, which largely originate in
India and China, are estimated to kill some 700,000 people a year!
Counterfeiters, similar to legitimate drug manufactures, are keen
to benefit from manufacturing costs in India that are around 40 per
cent cheaper than other markets. As a result, India's
counterfeit market has reportedly grown at a rate of about 25 per
cent per annum, and represents a significant proportion of the
global counterfeit drug market (thought to be worth between $75
billion and $200 billion a year).

In response to the significant concerns raised by importers of
Indian pharma products, the Indian Government, WHO, and the
partnership for safe medicine (PSM) are putting in place
initiatives to combat counterfeit drug manufacturing,
including:

upgrading the capacity of the state governments by equipping the
state drug testing laboratories with modern technology and latest
rapid testing equipment

enforcing serialisation, non-clonable packaging and 2D
barcoding

investing in more 'new drug manufacturer
inspectors'.

The intention being to identify quality and safe medicines from
spurious and unsafe medicines in the supply chain, and ensure
prompt action against manufacturers and dealers found trading in
fake and unsafe medicines.

In addition to the challenge of counterfeit manufacturers,
legitimate manufacturers making up India's booming
pharmaceutical export industry are also attracting the attention of
foreign regulators such as the FDA. It's easy to see why as
India is the biggest foreign supplier of medicines to the US and
has about 200 FDA-approved drug manufacturing facilities. Indeed,
India produces nearly 40 per cent of generic drugs and
over-the-counter products and accounts for 10 per cent of finished
dosages in the US. The FDA has highlighted a growing number of
quality issues and last year added seven new inspectors to its
India office, bringing the total number of staff to 19. Increased
FDA oversight has led to some 19 drug manufacturing factories
across India being barred from supplying medicines to the US. With
restrictions, including import alerts imposed on the facilities of
a number of life science multinationals.

Clinical trial quality

In many ways India is the ideal location to conduct clinical
trials given its diverse pool of patients with diverse treatment
needs and access to a large, scientifically skilled, workforce.
This has caused huge growth in the number of clinical trials
however, capacity to regulate trials has not kept pace leading to a
number of unethical practices such as; a lack of patient
compensation for adverse events; approval of drugs without clinical
trials and lapses in informed consent procedures. Again increases
in regulatory control by the Indian government, in the form of
mandatory trial registration and the creation of numerous
committees tasked with overseeing trial approval, trial execution,
and ethical treatment of patients, is starting to have a more
positive impact. The bad news is that delays in new drug approvals
as a result of the new regulatory control regime is forcing some
multinational companies to rethink their clinical trial activity in
this market.

Patent issues

In India, 70 per cent of expenditure on healthcare is
out-of-pocket, which has led the government and its judiciary to
take steps to promote the use of generic products and prevent
prices of lifesaving drugs being set by market forces. This has
caused a number of issues for multinational companies, leading some
to question the commercial viability of India:

in April 2013, Novartis lost a six-year legal battle after the
Supreme Court ruled that small changes to its leukemia drug Glivec
would not get a new patent

These challenges, amongst others, have caused pharmaceutical
industry growth to slow over the last year (from 16.6 per cent to
9.8 per cent), a trend that both domestic and multinational
companies are looking to reverse. For this to be achieved companies
will need to work closely with the Indian government, regulators
and other key stakeholders to establish compliant business
practices that are commercially viable. Some of the solutions
include:

bolstering internal compliance to keep up with evolving global
and domestic regulations concerning quality. This has the potential
to drive significant competitive advantage

striking a balance between ensuring affordability of, and access
to life saving treatments with securing the future of innovative
new medicines globally. Current patent laws have good intentions
however, multinational companies, looking to emerging markets for
growth as the price squeeze continues in traditional markets, have
been left in a difficult position. Can the developed world continue
to foot the bill for innovation? Increasingly it seems R&D
engines need all the help they can get!

If India can adopt these solutions it has the potential to grow
to a level that's comparable (in value terms) to most developed
markets by 2020 – something that pharma companies of today
surely cannot ignore?

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guide to the subject matter. Specialist advice should be sought
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